Maybe it makes more sense to tax land rather than income. That way we don't have to worry about where workers live at all. Whoever owns the ground pays the tax. If a worker wants to be mobile, that's fine, he indirectly pays taxes through the rent (or hotel bill) of wherever he chooses to take up residency.
Secondarily, consumption taxes are usually far easier to administer than income taxes. Identifying the "true residence" of a worker is a messy and arbitrary business. But in most cases any single good, service or product can usually be assigned a jurisdiction. The EU's been handling cross-border VAT taxes for decades with very few complications.
Economists have been telling us for centuries that Georgist land taxes and VAT taxes are far more economically efficient than income taxes. The only real advantage income tax has is that it's easier to satisfy our notions of fairness, in that rich people should pay higher rates than poor people.
That's harder to do when taxes are evaluated on a per-property or per-product basis rather than per-person. However a simple solution is probably just to create a UBI, handed out to every citizen no questions asked. Since a UBI is essentially a fixed "negative income tax", it makes the tax burden highly progressive, especially for the lowest income groups.
Whoa, I don’t know why, but I never thought of UBI as a negative tax, let alone a progressive one. But yes, if it’s a fixed rate, it would be progressive.
Have you heard any other critiques/opposition to what you proposed above?
Fair point. Perhaps some things get more standardized across regions, like income tax, and other things stay geographically defined. A balance between standardization and localization.
But overall, I have no idea. Just seems as if government hasn't known how to handle very well things that happen across geographic boundaries. Maybe that's because government is geographically bound.
If I sell a digital file online, if someone buys it in Spain, Germany, France, and Italy, I have to collect and submit VAT at four different rates for just four customers.
I'm not sure what the answers are, just really hoping we start discussing this as a society, because things may become even more geographically independent.
(Some) government services and their beneficiaries are geographically bound, so it makes sense that the fundraising for such services is also geographically bound.
On the face of it, this makes sense. Some services will always be locally bound, because things like police or fire wouldn't make much sense at a federal level; why should someone in Billings have input on policing in New York City, or vice versa? Should someone in Cork have say on how Bucharest is handling garbage pickup?
Whether or not the current legal subregion boundaries (for the US, the states) make much sense is another story, but the Founders were of the opinion that the imperfect state borders would be preferable to having the federal government exercise complete control lest it fall into the hands of a tyrant.
I really like those points. At the end of the day, the local government charges money (taxes) to provide services (police, fire, etc), and yeah, many of those are like local businesses. Local people pay to receive local services.
I guess I'm just wondering if they have to pay for those local services through income tax and not some other tax (e.g., property, road, sales) that would be more local.
Just seems to me that income tax is local when someone is physically performing work at the place of labor (e.g., factory, store) and confuses me when it's done more virtually. I guess I technically work on my computer in a location, so then yes, where I physically type could be the location of income.
I don't know. I also think health insurance being state-based and employer-based, and just imagine the level of complications that HR will have to deal with.
It's reasons like this why I think the post-COVID death of the high-COL city is greatly exaggerated.
Because we live in a federal system, the definition of what is "locally" taxable and what is not varies betweens states, and at a global level this varies between countries (the US taxes global income, which is uncommon), and obviously these entities are not inclined to do things that would reduce their funding. Even if they could reduce some taxes and raise others to make up for it and the end result made "more sense", how to raise others is a big fight in and of itself, and so they usually don't go through the bother of debating all of this.
These types of debates have already happened to some degree; a lot of New Jersey residents work in New York, and the way the dust has currently settled is that New Jersey will credit income tax paid in NY by NJ residents. Not everyone is happy with this arrangement, and whether or not it is working optimally could be debated until the heat death of the universe, but it is a valid allocation of resources that is working at some minimal level. This will probably blow up now that remote work enables a nearly endless combination of jurisdictional fights.
Yes, i love these points especially the last one. With remote, it’s no longer just two neighboring regions but so many different possible combinations.
Your VAT example is wrong. You would not reach minimum thresholds for VAT compliance on the basis in a single sale of a digital good into a foreign country.
Ahh, thank you! Good point. I’ll change my rhetoric on this. I just checked the minimum thresholds and the lowest one I found in Europe was Finland at €10,000, with almost every country having a different threshold. So yes, unless it were a very expensive digital good, then one sale wouldn’t do it.
I think the logic still applies, in that when I sell it here from my home in the US, I’m supposed to track and monitor who in which countries are buying how much and then stay up to date on all the tax laws of all those countries.
I really like having different states and cities be able to make different decisions about the tax/service balance... some states and cities can have higher taxes and provide more services, while others can have low taxes with few services. People are then free to decide which type of system they prefer to live in.
I would hate to have to have only one single balance decided for everyone in the world.
I strongly agree! I liie the variations and local differences. The local decision making power. I don’t want it all to be the same.
I just think with the internet, while our bodies may be in one place, we interact with people from so many other places. For example, in this thread, I may be interacting with people from maybe 5 different US states and maybe 5 other countries. Which region’s law applies? The one where I am physically present? The one where the HN owner is registered? The one where the HN server is located?
If an employee lives in Florida but works for Facebook remotely, a company based in California but maybe registered in Delaware, which state’s labor laws apply to that employee?
Maybe these things are obvious to others and I’m just far behind on understanding legal jurisdiction, but I just think things aren’t so clearly defined as “local” anymore.
There could certainly be virtual, geography-free, government-like, organizations that would be orthogonal to local government. You could be a "citizen" of both maybe? One could imagine health care, professional services, etc in exchange for some taxation? You still need local gov obviously for roads, police, etc.
One might even argue these virtual governments make more sense than, say, employer sponsored healthcare.
Exactly! I mean, in a way, governments seem like SaaS, just trying to provide all services, with tax being the membership fee, some members being more subsidized by other members.
Geographic governments make sense for many reasons and yet it seems that virtual governments could provide other services.
I wonder how much the Cathloic church is similar to this idea of a virtual or rather, geographically distributed government.
> some members being more subsidized by other members
Good point, another essential part of civilization. You might add though, that some citizen/users can contribute in ways other than fees: in communes/collectives, you might say contribute some professional services in exchange for virtgov ones. Although barter is still basically money, the virtgov can sell that work product outside, like a corporation, because the lines are fuzzy anyway.
yea, good point. Maybe that virtgov becomes really good at providing emotional healthcare to its citizens and another gov, virtgov, corp, or org wants to get better at that, it could provide training or consulting for a fee
